 |
How valuable is the service
that brokers are providing?
The broker's argument goes like this: "It's the seller
that pays that money, not the buyer -- so you're getting the
broker's services ABSOLUTELY FREE! Without a broker, you won't
find all of the homes available to you, and you may not be
informed about all of your rights and responsibilities. Buying
a home is a serious endeavor. There are a lot of legal and
financial hoops to jump through, and you need to know that
you have someone on your side. What's more, the real estate
agent can help you find and evaluate financing, and steer
you toward a good home inspector and settlement attorney."
Now let's look at the counter-argument: Supposing there were
no agent in the picture, would the price be $15,000 less for
the house? You and the seller could save that money and split
it.
No one can predict precisely what that market will do -- it's
a bit like asking how many agents... er... angels can dance
on the head of a pin -- though it certainly makes sense that
the price would be less. Any time you can leave out a middleman,
you're going to save money.
However, this is not always practical. It's for that reason
that most of us go to retail stores and not wholesalers --
we'd rather buy that pen at Wal-Mart than go to Bic's manufacturing
plant and ask if we can buy them direct. The retailer is providing
a service (convenience, chiefly) and, for that, we are prepared
to pay the markup.
FSBO: For Sale by Owner
If you are able to find a house that is for sale by owner,
one that you like, which you feel is priced at or below market
-- by all means, go for it. It may be that someone you know
has decided to sell, or that you've found the place simply
by driving through the neighborhood and noticed the sign out
front. You may have found the place through the classifieds
in your local paper. You'll need an attorney to step you through
the legalities and the paperwork, but you could end up saving
a pile of money.
Similarly, if you can find a seller-financed home, where the
seller may even be amenable to a rent-to-own situation (wherein
the rent you pay goes toward buying the house, if you should
decide to buy at a later time), then, again, go for it. The
opportunities do exist.
What About the Web?
Let's say that you're moving to (choosing a city at random)
Phoenix, or (a state) Maryland. You boot up your computer,
log onto the Internet, and type "For Sale by Owner"
into one of the search engines. Sure enough, you'll come up
with a list of sites. The problem, as of this writing, is
that the sites carry few listings.
For example, By Owner Online lists only two cities in Maryland,
and a search for a standard-sounding single family home turned
up zero matches. Another site, the National For Sale By Owner
Network, says that it is a network of FSBO publishers with
a combined readership of 10 million people and "represents
tens of thousands of homes for sale." But it currently
lists no homes in many states, including Arizona. It does
have several homes listed in Maryland.
Down the road, though, as this practice becomes more widespread,
you may not only be able to type in the city and state, but
the neighborhood, and several dozen possibilities will come
up. It's only a matter of time before this happens. When it
does, the real estate industry will very likely begin undergoing
some changes.
There is another option: Realtor.com. That's right, you'll
be dealing with Realtors.
Conclusion? It's much more difficult to find a house without
an agent, since the overwhelming majority of houses are listed
with agents. If, however, you do so, more power to you.
Assuming that you do need an agent, you need to make sure
you have a buyer broker. We cover that in an article entitled,
aptly, The Buyer Broker. |
|
|
|
